A spiralling cronyism scandal linked to the Japanese prime minister and his wife has reached fever pitch after the finance ministry admitted to tampering with records to remove references to the pair, according to the media reports here.

The altered documents relate to the 2016 sale of state land to school operator Moritomo Gakuen in Osaka at one-seventh of the appraised value with the alleged involvement of first lady Akie Abe, who supported the school's ultra-nationalistic education policy.

Abe has repeatedly denied he or his wife did favours for school operator Moritomo Gakuen, which bought the land, and has said he would resign if evidence were found that they had.

Fourteen of the original documents were rewritten by the ministry after the scandal came to light early past year, Kyodo reported citing an anonymous insider in Abe's Liberal Democratic Party. Akie Abe was the honorary principal of the envisioned school but stepped down after the land sale drew public attention.

Opposition politicians have called for Aso to resign.

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"It has become clear that there was a cover-up and falsification", opposition Democratic Party leader Yuichiro Tamaki told reporters.

A finance ministry official said 14 items had been altered in the documents after February, when the scandal broke, at the instruction of the ministry's finance division to match testimony in Parliament. He said Aso should resign and parliament hold hearings on the matter.

The risk for Aso and Abe, experts said, is that the suspected cover-up does more damage than the land sale itself.

Japanese government bonds were steady to slightly weaker on Tuesday though trading was slow as investors anxious whether a scandal engulfing Japanese Prime Minister Shinzo Abe would grow further to threaten his position and policies.

The 77-year-old Aso, who doubles as deputy premier and whose backing is vital for Abe, apologized for his ministry's actions, but said that he had no intention of stepping down.

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"At the very least, it seems that Aso's chances of surviving as finance minister are diminishing rapidly", wrote Tobias Harris, vice president of consultancy Teneo Intelligence, in an email.

Shinzo Abe acknowledged the new revelations "could undermine trust in the entire government" and added: "I deeply apologise to the people", said a report in The Guardian.

Last Friday, National Tax Agency chief Nobuhisa Sagawa abruptly quit over his remarks in Parliament about the case. "Now the USA is back to goldilocks at least for now, the tariffs are less severe, and Kim and Trump are to meet", said Shane Oliver, Sydney-based chief economist at AMP.

The conservative Yomiuri newspaper and public broadcaster NHK both reported declines in support ratings for Abe's Cabinet in polls released Monday.

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